White-Collar Crime: Peeling Back the Layers
Updated: Feb 26
By Heidi J. T. Exner, CFE
What is White-Collar Crime?
White-collar crime does not have a universal definition. Edwin Sutherland coined the term in 1939 to describe forms of elite deviance that are non-violent or indirectly violent, which are typically motivated by financial gain. Individuals, corporations, groups, and governments can be perpetrators. Some white-collar crimes are motivated by power in addition to financial gain (e.g.: election fraud).
The “crime” part of “white-collar crime” is misleading, particularly in Canada. Most offences that could be classified as white-collar crimes, if they are addressed at all by the law, result in regulatory or civil liabilities and not criminal charges. Canadian law also rarely provides meaningful recourse for victims of these offences.
A broad spectrum of activities classify as white-collar crimes. Fraud, falsification of documents or records, embezzlement or laundering of funds, the undue exercise of power or influence, and abuse of systems or public trust are all tell-tale markers.
When we try to define white-collar crime, we often think of scandals. We think of Enron, Computershare, Bre-X, Theranos, or a host of other large-scale incidents that we have seen in the news. However, we often fail to identify or relate to the harmed parties in these cases (or if we do, we think of them merely as shareholders who lost money that they had the privilege of investing to begin with, or something similar to that). It’s easy to look at white-collar crime this way because that’s really the extent of how it is understood in general society. It is little more than a source of entertainment or gossip, detached from our own realities. We are amused by the stories, assign blame to single parties or groups, shrug our shoulders, and move on.
In my view, this is a dangerous and incomplete view of this incredibly complex array of activities. This view compartmentalises them into something that doesn’t affect you or me, thereby minimising their true impact. The reality is that white-collar crime flourishes in plain sight in our daily lives. For every instance that we name, there are countless other instances we do not.
What if White-Collar Crime is Really About What Constitutes Acceptable Behaviour That Causes Harm at the Expense of Others?
What a concept, right? When we look at white-collar crime this way, we can find it everywhere. It’s at the core of industries that rely on the exploitation of land and animals, within the disgruntled accounts receivable clerk’s cubicle, in corporate culture and governance, in the interactions among those who sell dreams and those whose desperation to believe them overrides their common sense, in the things we consume, and in the very legal framework that governs it all.
There is little in this world that is truly what it seems. I am not saying there is always something nefarious under the surface of what we see, but I am saying that portraits of well-meaning people can become distorted into something monstrous, and ill-intentioned people can be lauded as heroes and saviours. This happens alarmingly easily, and those who understand the power of controlling narratives also understand just how easy it is to do it: through abuse of trust.
I recognise that what I am describing is not conceptually simple. As law students, you may have surmised by now that “truth” is often comprised of layers of different—and sometimes conflicting—information that is subject to interpretation. As these layers intermingle, notions of what is real and what is perceived get sticky. Intentions are not clearly “good” or “bad,” and we are never sure that we have all the information we need to make those calls. The law stumbles to prove culpability for white-collar crimes partially for this exact reason. The result? In the overwhelming majority of cases, those left holding the proverbial bag (i.e.: who suffer the most harm) are typically the most innocent parties. They are the defrauded, the taxpayers, the consumers, the exploited animals, and even the environment. They are sometimes even the whistleblowers who try to expose wrongs.
Our Failure to Hold the Correct Parties Accountable for Harm is Systemic.
It’s the failure on the part of environmental regulators, who skew calculations for monies owed by companies who poison land in order to “better facilitate” industry. It’s the lack of effective communication between securities commissions and the criminal justice system (of which neither can take evidence compiled by external forensic experts, and whose operations lack resources to build their own expertise because they leave up to 86% of the fines they levy uncollected). It’s the whistleblower protections that only protect employees, and not shareholders of closely held corporations or other parties who are most likely to be privy to fraud. It’s the legislators who appease powerful agricultural lobbyists to enact “ag-gag” laws that punish activists, investigators, and journalists for bringing egregious animal abuses into the public eye. It’s the network of professionals who help their buddies conceal assets ahead of divorce proceedings or bankruptcies. It’s committee “investigations” of money laundering that always manage to come up empty—in a country that is globally known for its “snow washing.” It’s the jurisdictional issues that prevent governance over how our cheap and convenient consumer goods are sourced and made. It’s the corporations (and the companies that serve them) who manoeuvre within the law to short-change parties in bankruptcy and insolvency proceedings. It’s the individual decision-makers everywhere, from makeshift home offices to skyscraper board rooms across the nation, who understand what they can and cannot get away with.
Ultimately, it’s the society that believes the narrative that it’s a problem that only affects “privileged” people, while their consumer spending, tax dollars, and physical health foot the bill.
It’s a system that relies on maintaining the status quo with widespread social complacency, which this false narrative serves.
But How Does All This Hide in Plain Sight?
It’s easy to believe something is not there when its effects are not immediately visible. We serve up the occasional head on a silver platter to perpetuate the narrative that white-collar crime occurs in isolated, self-contained incidents. Meanwhile, white-collar crime is like a noxious gas that is leading us to our demise. I am not trying to sound dramatic; I am merely speaking the truth.
We need to start looking at this and understanding it for what it is so that we can create proactive solutions for real and meaningful change. I started the Exner Foundation for this reason. I am not delusional enough to think we’ll save the world, but I do think it is worth the effort to move the needle by getting more smart people in the same room to start asking the right questions.
Even the Longest Journey Begins with a Single Step.
If we can increase awareness about the true extent of white-collar crime’s impact, and get people across all disciplines and industries to come together and exchange knowledge, that’s a great first step towards understanding what we are dealing with. Getting the minds together is Step One. Advocacy and awareness run parallel to this, of course.
Fostering Future Thought Leaders.
The Exner Foundation wants to engage and encourage future thought leaders from all disciplines of study via on and off campus events and an annual competitive scholarship. Our first event is an info-panel that is set to run in person at the University of Calgary in the Winter 2023 semester. Details about this event will be circulated via the Moot Times and the university.
The Exner Foundation is also awarding a scholarship to up to two Albertan JD or graduate students for their contribution to our understanding of white-collar crime. This scholarship will be in the form of an essay contest which will open in December, so keep an eye out for this announcement, too.
If you are interested in learning more or volunteering for the Foundation, please visit www.exnerfoundation.org, or contact email@example.com.